All Forum Posts by: Kevin Olson

@Kevin Olson, I second what @Matthew Couto is saying about heading to a meetup!  On the tail end of your last response, you threw a few options out for reply.

Single Family home (1 door) to flip "and rake in the profits"....but taxes will eat that up- even if you do everything right in the flip (which has a low probability).  Or go for a multifam. (2, 3, or 4 door)?  So let me answer a question with a question...are you willing to house hack (aka, living in one of the unit while repairing the others or living in a single family home and renting out the other bedrooms)?  That's the lowest risk decision, as you need to personally pay for shelter, yourself.  So it might as well be paying down the mortgage for your investment property.  Frankly, my best advice is to take a network with other investors in real life.  And if you feel comfortable learning under one or two of them, offer to help in whatever their pain points are, so you can see the inside of their operation.  Build trust.  Build value.  These guys aren't your competitors- they are just in the same marathon as you.  And no matter how big their operation is, they have their eye on the guy or gal doing it better and bigger than them.  And listen to the podcasts...start from episode 1 and go all the way through.  They're free.  And all of those guests are here on the forum.  So you can ask them questions to what you didn't understand.

Lastly, get the books. Likely, you've already read "Rich Dad, Poor Dad." It's almost a baptism into real estate, to do so. But Brandon Turner's books are excellent for just starting out and beyond. Right now, I'm getting through the BRRR audiobook as I'm literally swinging the hammer on my latest rehab (I don't need to physically do the rehab...its just my happy place!) and am gathering nuggets that I'd rather not gain through hard knocks.

Frankly, I would not start this race with a sprint to the first door under your belt, unless you were house hacking.  And even then, keeping an eye on the credit cycle, unless a deal was just a no brainer, I'd work on building my credit to be the best it could be and pay down high percentage credit as much as possible.  Right now, you could throw a stone anywhere and hit a lender.  And while they aren't titled as such, they might as well be calling their loans "ninja's" as in "we don't bother to look to hard at your income or job history or credit history"...and we all now know that those loans were really sub-prime or usery loans.  My point is that a good credit rating and liquidity will be much more valuable in the next year or two, than it is now.  So why not invest in the thing that isn't valued as much (as in the mantra of buy low and sell high), by investing in yourself (education) and learning how to make a real estate business operation or system.  

So, that's my 2 cents.  As always, consult ppl smarter than me!

Hey Kevin, I'm going to stay as close as I can to the points in your question: You're just starting out (for context, I only have a couple doors, so look for more opinions than mine). So you likely don't have a system in place. You say a 4 door is under contract, but is it under your contract...or are you the "safety offer" if another investor falls through? I'm going to assume its your contract. What are your current and projected numbers? Are you BRRR'ing this, or only downpaying it? How much buffer have you put into your projections? I ask because doing this will always cost more and take more time than the projections...and these are the things you have input in. What about the pending completion of the macro-credit cycle? A recession is objectively due? Will you still be cash flow positive in a 20% lower valuation?

Maybe you don't care about the value dropping as you'll be a "buy and landlord."  But your banker will.  

Commercial is a different beast, altogether.  It's definitely a different system.  Do you have that in place?

My advice?  Answer these questions (and many more)!  If you have built buffers and contingencies into your systems, then consult an old dog and ask if what you're planning makes sense.  

As you're doing your first deal, it's what you don't know that can either suck, or knock you out of the game. The only actionable advice I'd give is to partner, partner, partner- with someone successfully experienced. That way, you'll still be moving forward, and the lower personal ROI is more accurately perceived as either tuition or ****-hit-the-fan insurance. That way, a homerun deal doesn't become a one-hit wonder.

I'm hoping others can add in their opinions...or better, best practices!

Clint